Working Paper
ICT Production and Diffusion in Asia

Digital Dividends or Digital Divide?

This paper examines the empirical evidence to determine whether Asian countries, despite having captured a disproportionately high share of global production of ICT goods, have as a group been laggard in the adoption of ICT in comparison to non-Asian countries. Using regression analysis, it is shown that as a group Asian countries have indeed had generally lower rates of ICT adoption relative to their levels of potential as predicted on the basis of their current level of development (GDP/capita) and competitiveness (world competitiveness index). In addition, disparities in ICT diffusion are found to be significantly higher among Asian countries than among non-Asian countries. In particular, a significant 'digital divide' is found to exist between the five more advanced countries of the region (Japan and the four Asian NIEs) and the other seven developing Asian countries. Policy implications of the findings for the Asian countries are highlighted.